Surprise, surprise! We’re in the middle of a long-lasting economic expansion, according to the latest Bloomberg Businessweek.
There’s a lot to complain about when it comes to the U.S. recovery. Unemployment isn’t falling fast enough or far enough. Manufacturing is weak. Gross domestic product is expanding at a modest 2 percent clip. Yet this recovery has one advantage: It keeps going. “The current expansion can continue another four to five years,” says Robert Gordon, a professor at Northwestern University and a member of the National Bureau of Economic Research committee that determines when recessions begin and end. That would make this upswing the second longest on record, behind only the 10-year period that spanned the 1990s. The average recovery since the end of World War II is 58 months.
If you’re dubious about the long-term economic prospects, this passage is unlikely to set your mind at ease:
In this expansion, inflation remains low and the central bank continues to stimulate growth. Consumer prices rose 1.1 percent in April from a year earlier, the smallest increase since 2010, according to U.S. Department of Labor data.
The Fed is buying $85 billion of assets each month to keep long-term interest rates down. It has promised to keep short-term rates near zero as long as unemployment remains above 6.5 percent and the outlook for inflation doesn’t exceed 2.5 percent.
So this expansion depends on artificial government stimulus overseen by the Fed? That sounds like a recipe for success.
